Property Management

Exam rule

Property management turns an owner's plan into daily action. The manager protects income, condition, service and long-term value. Common functions include leasing, rent collection, maintenance, staffing, purchasing, budgeting, marketing, records and reports. Managers work with office, retail, residential, condominium and cooperative property. A resident manager handles daily matters at or near one property. The title alone does not decide whether a license is needed. New York looks at the work, the client and the payment. Renting, negotiating a rental or collecting rent for another for compensation is real estate brokerage. A broker may perform that work through properly associated licensees. A salesperson cannot run an independent management business. An owner managing the owner's own property is not working for another. Maintenance alone does not become brokerage merely because someone is paid. The license question changes when the worker starts negotiating leases or collecting rent for an owner. Property management education and professional designations can build skill. They never replace a New York license when Article 12-A requires one. Strong managers understand people, buildings, money, law, markets and risk. They also know when a lawyer, accountant, engineer or licensed trade professional is needed.

Exam rule

A management proposal helps an owner compare a manager's plan, services, staffing and price. It is not automatically the final contract. The signed management agreement creates the agency and controls the relationship. It should be written, signed and matched to the property. The syllabus lists nine agreement subjects. Identify the property and the agreement's length. State the manager's authority and reporting duties. Explain the management fee and other compensation. Assign accounting responsibilities. Address insurance and risk management. Set the form and timing of reports. State the owner's responsibilities and objectives. Explain how and why the agreement may end. A useful authority section covers leasing, rent changes, vendor contracts, hiring and spending. It should set emergency power and approval limits. Accounting terms should cover bank accounts, supporting records, reconciliations and owner access. Termination terms should protect records, keys, contracts, funds, deposits and open work orders during the handoff. The broker needs owner authorization before offering space for lease. The broker also needs consent before placing a sign on the property. A party signing a manager-prepared agreement must receive a copy promptly. Clear writing does not expand the manager's license or permit an illegal direction.

Exam rule

The syllabus calls the property manager a general agent. A general agent handles a continuing range of authorized acts for the principal. The manager is also a fiduciary. Loyalty requires placing the owner's lawful interest ahead of a hidden personal benefit. Obedience applies only to lawful instructions within the agency. Care requires informed action, sound records and qualified help. Disclosure requires sharing material facts and conflicts. Accounting requires tracing the owner's money and property. Confidentiality protects information that the manager should not misuse. New York adds a direct spending rule. A managing broker cannot keep a commission, rebate or profit on client expenditures without full knowledge and consent. The owner sets four subjects named in the syllabus. Those are goals, maintenance criteria, the project's future and reporting. Goals might favor cash flow, occupancy, tenant retention, repositioning or long-term value. Maintenance criteria define the expected service and condition. The future plan shapes today's leases, repairs and capital work. Reports compare actual results with that plan. Risk management finds possible losses and chooses a response. A risk may be avoided, reduced, transferred through insurance or contracts, or retained with planned funds. The agreement defines authority, but law still sets the floor. An owner cannot authorize discrimination, unsafe conditions, commingling or an unlawful eviction.

Exam rule

The lessor gives the right to occupy. The lessee receives that right. A tenancy for years lasts for a definite term. It can be shorter than one year. Preventative maintenance, also called preventive maintenance, happens before failure. Corrective maintenance fixes a known defect after it appears. A work-order system should rank life safety, essential services, active damage and routine service. Residential leases carry a warranty of habitability. The home and related common areas must remain fit and free from dangerous conditions. A tenant cannot waive that protection. Actual eviction physically removes or excludes the tenant. Constructive eviction can arise from serious interference when the tenant leaves the affected premises. A manager should document complaints, access, work, notices and follow-up. Rent collection has its own sequence. A missing residential payment triggers the notice required by Real Property Law. A nonpayment case generally needs a written fourteen-day rent demand. The court process comes before a warrant and lawful removal. Lock changes, force and service shutoffs are not collection tools. A large rent increase or nonrenewal can require advance notice. An increase of at least five percent can trigger this rule. The period is thirty, sixty or ninety days. Occupancy or lease length sets the period. Current notices can also require Good Cause coverage information. When a residential tenant leaves early, the landlord must take reasonable steps to rent again. State rules are only the starting point. Managers must also check local codes, rent regulation and the governing lease.

Exam rule

A property manager coordinates people before problems reach the owner. The core process is simple. Spot the need, assign the work and check the result. Supervision means setting priorities, standards, schedules and follow-up. Staff records should show assignments, training, incidents and completed work. Union agreements can control jobs, hours, overtime and grievance steps. Purchasing should use defined authority, fair comparisons and conflict disclosure. A manager should check vendor insurance, qualifications, scope, price, schedule and completion. No hidden vendor benefit belongs in the manager's pocket. Building knowledge starts with triage, not amateur repair. Do not guess at a fix. Managers monitor HVAC, chillers, structure, waterproofing, plumbing and electrical service. They also watch gas, oil, water, elevators, security, alarms and routine maintenance. Warning signs should lead to safe isolation, records and qualified help. Leasing skills include space planning, area design and building layout. A marketing plan states the property's position, lawful audience, message, channels, budget, schedule and measures. It should track inquiries, tours, applications, leases, cost and vacancy. Keep what works and change what does not. Marketing and screening must use consistent, lawful standards. Associated licensees provide New York's fair housing notice at first substantive contact. Housing providers also have notice duties concerning disability accommodations and modifications. Managers must understand local, state and national codes. They should recognize when permits, inspections or certificates apply. Most of New York follows the Uniform Code, while New York City uses its own construction codes. Ecology is part of the job because buildings affect air, water, soil and occupants. Before most pre-1978 residential leases, federal lead disclosures and records are required. Managers should identify the issue and use qualified professionals. The syllabus also expects working knowledge of appraisal, finance, money markets, depreciation, trends, local conditions and construction.

Exam rule

An operating budget plans a normal year of property income and costs. The math follows one path. Start with all scheduled rent at full occupancy. This is potential gross income. Subtract vacancy and credit loss. Add other property income. The result is effective gross income. Subtract allowed operating expenses. The result is net operating income, or NOI. The course source also shows replacement reserves before NOI. Industry reports sometimes present reserves below NOI, so follow the question's stated convention. Operating expenses can include payroll, utilities, repairs, insurance, property taxes, management and routine contracts. Debt service, income taxes, depreciation and major capital work are not normal operating expenses. A variable expense changes with occupancy, use or service demand. Some expenses remain relatively fixed during the budget period. A capital expense adds, replaces or substantially improves a long-lived asset. A roof replacement is capital work. A small roof repair is normally operating work. A capital reserve budget sets aside funds for major future replacements and improvements. A stabilized budget estimates normal performance after temporary lease-up, vacancy or unusual expenses settle. Stabilized never means perfect or fully occupied. A budget becomes useful when the manager compares it with actual results. A variance report names the difference, explains the cause and states the response. A forecast updates the likely year-end result. Managers should connect each variance to cash, service, risk and the owner's plan.

Exam rule

A rent roll is the property's organized lease schedule. It normally lists units, tenants, lease dates, rent, concessions, deposits, arrears and occupancy. The roll must agree with signed leases, amendments, renewals and payment records. A ledger shows the transactions behind each balance. Bank reconciliation compares the books with the bank and explains every difference. A property management report turns records into decisions. Useful sections cover occupancy, leasing, collections, arrears, income, expenses, variances, cash and open work. The report should also cover capital projects, claims, incidents, compliance, risks and requested owner decisions. Monthly reports support quick action. Yearly reports show the full period, trends and results against plan. Other people's money needs stronger controls. A broker keeps principal funds separate from personal funds. The broker uses a special federally insured bank account and deposits the money within three business days. The money must remain secure until deposited. The broker accounts to the client and remits unspent money within a reasonable time. Tenant security remains the tenant's money and cannot be commingled. The holder gives written bank and deposit information after placing it with a banking organization. Property with six or more dwelling units requires an interest-bearing security account. Current New York rules limit covered residential deposits to one month's rent. They also require move-in and requested move-out inspection procedures. Valid deductions exclude ordinary wear and must be itemized. The remaining deposit must be returned within fourteen days after the tenant leaves. Rent-stabilized and other covered units now follow parallel protections under the correct section. Cash residential rent requires an immediate written receipt. An indirect covered payment gets a receipt within fifteen days. Cash-rent records must be kept for at least three years.

Exam rule

The basic controls stay the same in each market. The building changes what managers watch. Office managers focus on access, systems, service contracts, lease dates and tenant work. They track usable space, shared areas and plans for outages. Retail managers study traffic, visibility, tenant mix, sales, hours and common areas. Anchor stores draw shoppers who can support smaller tenants. If one closes, other leases and the marketing plan may be affected. Residential managers focus on homes, safety, privacy, deposits, notices, fair housing, service and turnover. Condominium managers work with unit owners, a board, common elements, bylaws, budgets and common charges. Cooperative managers work with a corporation, shareholders and proprietary leases. They also follow house rules, maintenance charges and board decisions. The manager serves the entity named in the agreement. The manager does not serve each resident as a separate client. A planned unit development, or PUD, may combine uses and shared areas under one approved plan. Management links the shared systems, documents and costs. Management office operations connect every market. The office routes calls, work orders, leasing, payments, complaints, emergencies and owner approvals. It protects personal information, contracts, keys and bank access. A useful dashboard tracks open items, deadlines, responsible people and completed work. Reports should fit the market. An office owner needs lease dates and system reliability. A retail owner needs traffic and tenant mix. A residential owner needs collections, service and compliance. A board needs cost, project and reserve information.